The attorneys at Nardone Limited regularly assist our clients with labor, employment, and human resource issues, including guidance on (i) federal and state regulatory compliance; (ii) discipline, discharge, and documentation; (iii) discrimination and harassment complaints and charges; and (iv) policies, procedures, and the development of employment handbooks. Please review our prior articles regarding: (i) Issues to Address in Your Employee Handbook; (ii) How the Fair Labor Standards Act and Ohio’s Minimum Wage Laws Affect Your Dental Practice; (iii) EEOC Releases 2014 Charge Statistics; and (iv) Unemployment Compensation and Other Concerns After Terminating an Employee. As an employer, it is important to keep up-to-date on the ever-changing federal and state laws, rules, and regulations that affect you as an employer, your employees, and their terms and conditions of employment with you.
Ohio Senate Bill 25 Overview
Ohio Senate Bill 25 (“SB 25”) was introduced on February 2, 2015 and was assigned to the Ohio Senate Committee of Transportation, Commerce, and Labor for review on February 4, 2015. Although SB 25 is still in the review process, it is still important for employers to be aware of the changes SB 25 could bring to you and your employees. If SB 25 passes, the following changes to Ohio’s labor and economic system would take place: (i) an increase in Ohio’s minimum wage; (ii) an increase in the current salary threshold in which one is eligible for overtime; and (iii) the standardization of the term “employee.” Within this article, we will discuss how the increase in minimum wage might affect Ohio employers.
Minimum Wage Increase
SB 25 proposes to increase Ohio’s minimum wage from $8.10 per hour to $10.10 per hour. As of 2015, the federal minimum wage is $7.25. With a $2.00 increase to the current state minimum wage and a $2.85 increase from the current federal minimum wage, employers will need to take steps to prepare if SB 25 is passed into law.
The largest change an employer may face is the rise in the cost of production. Of course, most employers will want to maintain levels of employment without the need to cut employees. Unfortunately, maintaining employment levels might be unrealistic with such a substantial increase to minimum wage. With a rise in cost of production, employers will need to come up with solutions to deal with the rise in their cost of production. Some solutions might include: (i) turning to new technology; (ii) reducing full-time positions to part-time; (iii) reorganizing; and (iv) contracting out certain duties and responsibilities.
The Bottom Line for Employers and Employees
The bottom line is that employers need to consider possible solutions to reduce costs if SB 25 passes and becomes law. Additionally, SB 25 might also negatively impact your employees’ job security.
Nardone Limited has advised many employers on changes in federal and state employment laws, such as the ones that will occur if Ohio Senate Bill 25 passes. We will keep you updated on the progress of SB 25. In the weeks to come, please also keep an eye for two more articles discussing SB 25’s other proposed changes.